ConocoPhillips (NYSE: COP) today announced it has entered into an agreement to sell its Algerian business unit for a total of $1.75 billion plus customary adjustments. The proposed sale is subject to co-venturer preemption rights and Algerian government approval.
ConocoPhillips has entered into an agreement with Pertamina to sell its wholly-owned subsidiary, ConocoPhillips Algeria Ltd., which holds interests in three major onshore oil fields located either fully or partially in Block 405a, Menzel Lejmat North (65 percent, operated), Ourhoud (3.7 percent, nonoperated), and EMK (16.9 percent, nonoperated).
ConocoPhillips’ 2012 net production from these fields averaged 11 thousand barrels of oil equivalent per day through October, and at Oct. 31, 2012, the net carrying value of ConocoPhillips’ Algerian assets was approximately $850 million.
“The sale of our Algerian business unit represents another important step in transforming ConocoPhillips’ asset base, and advances the strategic interests of both Pertamina and ConocoPhillips,” said Don Wallette, executive vice president, Commercial, Business Development, and Corporate Planning.
The transaction is anticipated to close by mid-2013. Through Sept. 30, 2012, the company’s 2012-13 asset disposition program has yielded proceeds of $2.1 billion. Including this transaction, the company has announced additional asset sales that are expected to generate proceeds of approximately $7 billion when complete. Funds generated from these transactions are intended to be used for general corporate purposes.
The proposed sale of its Algerian business unit is part of ConocoPhillips’ plan to increase value for shareholders through portfolio optimization, focused capital investments that deliver growth in production and cash margins, improved returns on capital, and sector-leading shareholder distributions.
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